The City of East Peoria is establishing its own grocery tax to avoid losing revenue when the state grocery tax ends at the start of next year.
The city council voted unanimously Tuesday in favor of implementing the 1% grocery tax, with some commissioners expressing regret but viewing it as a necessity.
“Budgets have been created and things have been purchased, and the city's plan is based somewhat on the revenue the city gains from this tax being in place,” said Dan Decker.
At Gov. JB Pritzker’s urging, the General Assembly approved repealing the statewide 1% grocery tax effective Jan. 1, 2026, as part of the 2025 fiscal year budget. Illinois had been one of only 13 U.S. states with a grocery tax.
Money generated by the state tax was being redistributed to the municipalities, so the repeal effectively closed off a revenue stream for local governments – unless they chose to enact a grocery tax of their own.
“The only thing I can see out of all this mumbo jumbo, and that is one taxing body took credit for lowering your taxes and put the burden on who was getting the money at the end to run their deal,” said East Peoria commissioner Michael Sutherland. “So I'm going to vote for this, but I'm not going to like it one bit.”
East Peoria Mayor John Kahl has been highly vocal in his criticisms of the state’s action. He has estimated that East Peoria stood to lose around $2 million annually without a grocery tax in place.
“That is part of the revenues that go back to local government; it was never the state's money to take away,” said Kahl. “But obviously we're finding out as time goes on, the state really gets a thrill in Springfield of taking away more and more of local governments authority, and it's sad to me.”
Commissioner Mark Hill explained to his colleagues that Illinois municipalities did have local grocery taxes until 1990. But that led to “a patchwork and amount of complexity” that prompted the state to enact sales tax reform and implement the 1% statewide grocery tax.
“The new law said the municipalities have the authority now to put the 1% sales tax back, which doesn't make a lot of sense to me if it was complex and varied and time consuming before,” said Hill. “It sounds like we've regressed and went back to that.”
Kahl labeled the state’s repeal “nothing more than a political stunt” that shifted the taxing burden to the local governments. He noted local governments have until Oct. 1 to pass their own grocery tax that would go into effect Jan. 1.
“We've opted to bring it forward now. A couple other communities have, and if I had to guess, just about every community will,” he said. “I know it's a difficult decision that I feel strongly that we have to make, and we have little choice.”
Working cash budget, appropriations
The council also voted 5-0 in adopting its annual appropriation ordinance and working cash budget for the fiscal year beginning May 1.
The appropriation amount totaled $134.6 million, up from $122.4 million in the current fiscal year.
“I've always described this as, ‘what can be legally spent.’ It's not what we're planning on spending, but it's the legal appropriations that we can spend up to that amount of money,” said Hill.
The largest appropriation amounts go toward funding police ($34.2 million), street and bridge work ($16.1 million), and water and sewer maintenance ($14.9 million).
The working cash budget amount has expenses at $99.3 million, up 4.6% from the 2025 revised budget.
“This one I've described in years past is, this is what may be spent,” said Hill. “The important thing to know is that we have complete transparency. In the packet, you can see down to the pennies where anything is has been planned, been approved.”
Pedestrians in medians
The council also unanimously approved a measure aimed at keeping pedestrians from standing or gathering in medians at 10 designated intersections, primarily along Main Street, Camp Street, and Washington Street.
“Officers from the city's police department noticed on several occasions recently where they found pedestrians and people kind of occupying the medians at these busy intersections where medians are very minimal, if they exist at all,” said city attorney Scott Brunton.
“It had created what I would say, essentially, are close calls. Fortunately, there has not been any fatalities or any injuries to date, but it certainly created some concerns with the police department.”
The move makes it an ordinance violation for anyone to stop, stand, or otherwise remain in the median and the immediately adjacent right-of-way at the specified intersections. Occupying the median through three consecutive opportunities to cross the roadway would be considered a delay in violation of the ordinance.
“It's long overdue, and it has been an issue and a major safety concern. So this is the best approach and best way to address it,” said Kahl.
The three identified Main Street crossings are at Camp, Washington, and Silver Street. The other Camp intersections are with River Road, Riverside Drive, Clock Tower Drive, and Spinder. The remaining Washington intersections are at River, Spinder, and Clock Tower.
“I've been at an accident on every one of those intersections, and the number of times that an accident occurs and the vehicle ends up in the places where people would be standing, I'm surprised we haven't had more issues with this in the past,” said Decker.
“People might be standing there thinking that they're not causing a problem. But an accident that occurs, those are high traffic areas, then they are right in line to be hurt as well.”
